Monday October 15, 2012
Jalan Sultan Ismail projects will unlock value in the prime location in KL
By SHARIDAN M. ALI
PETALING JAYA: The redevelopment of some of the buildings in Jalan Sultan Ismail, one of the longest and main arteries in the heart of the capital, is gaining further traction to unlock the value in the prime location and meet the future demands of the Greater Kuala Lumpur.
Just last week, Permodalan Nasional Bhd (PNB), which acquired the former MAS building in late 2006 for RM130mil in cash, awarded a RM673mil contract to Ahmad Zaki Resources Bhd to demolish the podium building and build a 50-storey tower hotel with six levels of basement parking. PNB also intends to refurbish the 35-storey office building on the site.
And in June, Tradewinds Corp Bhd confirmed in a news report that it would demolish the Crown Plaza Mutiara Hotel and Kompleks Antarabangsa to make way for a mixed-development project, called Tradewinds Centre. It is reported that the project might cost around RM6bil.
The redevelopments in Jalan Sultan Ismail is not only to further unlock the value of the land there but also to catch up with the growth and development of nearby prime areas such as Kuala Lumpur City Centre (KLCC) and Bukit Bintang.
Tradewinds group chief executive officer Shaharul Farez Hassan told StarBiz that the company planned to develop Tradewinds Centre as an iconic building as well as a destination.
“Key to the development will be the concept of urban and environmental harmony.
“As one of the few green buildings in Kuala Lumpur, Tradewinds Centre's outstanding architecture will be complemented by a central Grand Plaza covering a large area of about one acre. This plaza will feature broad open spaces, breezy courtyards, lush landscaping and much more,” he said.
Shaharul said the company had consciously allocated a Grand Plaza in the centre of the development, much like to the sunken plaza in Rockefeller Centre in New York and Roponggi Hills.
“The Grand Plaza would be a focal point for the public and users to enjoy the stunning environment, socialise and relax.
“It can also be used for festive events such as New Year countdowns or other celebrations.
“Its signature profile will greatly contribute to the overall composition of the city skyline.
“Its large scale and memorable public plaza unites neighbourhoods in the urban fabric, creating a dynamic focal or meeting point that is systematically linked via pedestrian-friendly walkways and public transportation,” he said.
On how the multi-billion ringgit project would further unlock the value of the land, Shaharul explained that the existing buildings were conceived during a period of lesser competition.
“Since then, the city and its buildings have grown to meet future demands for better quality, larger spaces and added features.
“While such buildings can be retrofitted and enhanced to address competition, there are limits to such a strategy. Looking towards the future, we have made the difficult but necessary decision to totally remake this location to serve the city's needs far into the future,” he said.
Furthermore, Shaharul said, the plot ratio of the existing buildings was small, at about five, thereby resulting in gross under-utilisation of the potential property value.
“Planned as an iconic, integrated and modern redevelopment with grade A building features, Tradewinds Centre would maximise its potential more than doubling the amount of allowable high value space,” he said.
Real estate consultant Rahim & Co group of companies executive chairman Senator Datuk Abdul Rahim Rahman said that in his opinion based on market demand and environment, hotels were more likely a better decision than office building as there was a oversupply of that now.
“And the Government is also confident that tourist arrivals would be good. Furthermore, the hotels rates in Kuala Lumpur are more competitive that in Singapore, Hong Kong and even Jakarta,” he said.
As for Jalan Sultan Ismail, Abdul Rahim said it was the prime location before the development of the KLCC which was now fetching better rates.
He added that Jalan Sultan Ismail was a long stretch where rental rates were RM5 per sq ft (psf) as opposed to RM8 to RM10 psf in KLCC.
“Although Jalan Sultan Ismail is not the prime location anymore, it will still remain as one of the prime locations in Kuala Lumpur,” he said.
Nevertheless, Abdul Rahim said it might be easier to get better yields in Jalan Sultan Ismail.
“For instance, if one wants to get a good apartment in KLCC area one has to pay around RM1,500 psf, but in Jalan Sultan Ismail due to its long stretch one can get a good apartment at RM800 psf, where it would be easier to get 5% to 7% returns.